Weight Watchers International, Inc., Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[Docket No. 9261]

Weight Watchers International, Inc., Analysis To Aid Public

Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged

violations of federal law prohibiting unfair or deceptive acts or

practices or unfair methods of competition. The attached Analysis to

Aid Public Comment describes both the allegations in the complaint

issued earlier and the terms of the consent order--embodied in the

consent agreement--that would settle these allegations.

DATES: Comments must be received on or before December 8, 1997.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

Richard Kelly, Federal Trade Commission, H-200, 6th & Pennsylvania

Ave., NW, Washington, DC 20580. (202) 326-3304. Ronald Waldman, Federal

Trade Commission, New York Regional Office, 150 William Street, Suite

1300, New York, NY 10038. (212) 264-1207.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 3.25 of

the Commission's Rules of Practice (16 CFR 3.25), notice is hereby

given that the above-captioned consent agreement containing a consent

order to cease and desist, having been filed with and accepted, subject

to final approval, by the Commission, has been placed on the public

record for a period of sixty (60) days. The following Analysis to Aid

Public Comment describes the terms of the consent agreement, and the

allegations in the accompanying complaint. An electronic copy of the

full text of the consent agreement package can be obtained from the

Commission Actions section of the FTC Home Page (for September 30,

1997), on the World Wide Web, at ``http://www.ftc.gov/os/

actions97.htm.'' A paper copy can be obtained from the FTC Public

Reference Room, Room H-130, Sixth and Pennsylvania Avenue, N.W.,

Washington, DC 20580, either in person or by calling (202) 326-3627.

Public comment is invited. Such comments or views will be considered by

the Commission and will be available for inspection and copying at its

principal office in accordance with Section 4.9(b)(6)(ii) of the

Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to

final approval, to a proposed consent order from Weight Watchers

International, Inc. (hereinafter ``Weight Watchers'' or

``respondent''), marketers of the Weight Watchers Weight Loss Program.

The Weight Watchers Weight Loss Program is offered to the public

nationwide through company-owned and franchised weight loss centers.

The proposed consent order has been placed on the public record for

sixty (60) days for the reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will again review the

agreement and any comments received and will decide whether it should

withdraw from the agreement and take other appropriate action or make

final the agreement's proposed order.

The Commission's complaint alleged that the respondent made

numerous unsubstantiated representations through consumer testimonials

and other advertisements that:

(1) Its customers are typically successful in reaching their weight

loss goals and maintaining their weight loss under respondent's diet

program;

(2) Overweight or obese customers typically are successful in

reaching their weight loss goals and maintaining their weight loss

either long-term or permanently; and

(3) Its weight loss programs are superior to other weight loss

programs in enabling participants to achieve and maintain weight loss.

The complaint further charges that Weight Watchers made false and

unsubstantiated claims that consumers using its ``Quick Success''

program would lose weight at a faster rate when compared to its earlier

programs.

The proposed consent order seeks to address the alleged success

misrepresentations cited in the accompanying complaint in several ways.

First, the proposed order, in Part I.A., requires the company to

possess a reasonable basis consisting of competent and reliable

scientific evidence when appropriate substantiating any claim about the

success of participants on any diet program in achieving or maintaining

weight loss. To ensure compliance, the proposed order further specifies

what this level of evidence shall consist of when certain types of

success claims are made:

(1) In the case of claims that weight loss is typical or

representative of all participants using the program or any subset of

those participants, that evidence shall be based on a representative

sample of: (a) All participants who have entered the programs where the

representation relates to such persons; or (b) all participants who

have completed a particular phase of the program or the entire program,

where the representation only relates to such persons.

(2) In the case of claims that any weight loss is maintained long-

term, that evidence shall be based upon the experience of participants

who were followed for a period of at least two years after their

completion of the respondents' program, including any

[[Page 52341]]

periods of participation in respondent's maintenance program.

(3) In the case of claims that weight loss is maintained

permanently, that evidence shall be based upon the experience of

participants who were followed for a period of time after completing

the program that is either: (a) Generally recognized by experts in the

field of treating obesity as being of sufficient length to constitute a

reasonable basis for predicting that weight loss will be permanent; or

(b) demonstrated by competent and reliable survey evidence as being of

sufficient duration to permit such a prediction.

Second, Part I.B. of the proposed order requires the respondent,

when making any claim that participants of any diet program have

successfully maintained weight loss, to disclose the fact that ``For

many dieters, weight loss is temporary.'' In addition, Part I.C.

requires respondent to disclose the following information relating to

that claim:

(1) The average percentage of weight loss maintained by those

participants (e.g., ``60% of achieved weight loss was maintained''),

(2) The duration over which the weight loss was maintained,

measured from the date that participants ended the active weight loss

phase of the program, and the fact that all or a portion of the time

period covered includes participation in respondent's maintenance

program(s) that follows active weight loss, if that is the case (e.g.,

``Participants maintain an average of 60% of weight loss 22 months

after active weight loss (includes 18 months on a maintenance

program)),'' and

(3) The proportion of the total participant population that those

participants represent, if the participant population referred to is

not representative of the general participant population for that

program (e.g., ``Participants on maintenance--30% of our clients--kept

off an average of 66% of the weight for one year (includes time on

maintenance program)).'' (In lieu of that factual disclosure,

respondent may state: ``Weight Watchers makes no claim that this result

is representative of all participants in the Weight Watchers

program).''

However, if Weight Watchers makes a representation about weight

loss maintenance that does not use a number or percentage, or

descriptive terms that convey a quantitative measure such as ``We have

a successful weight management program,'' then in lieu of the above

disclosures it may make in connection with such representation the

statement ``Check at our centers for details about our maintenance

record'' Weight Watchers would then be required to make the required

maintenance information disclosures, in a printed document that is

distributed to consumers at weight loss centers in accordance with the

procedures set forth in Appendix A of the proposed order. The proposed

order specifies that consumers must acknowledge receipt of this

document and that it must be signed by the client and retained in the

customers record of service for three years.

Third, Part I.D. of the proposed order addresses advertisements

containing an endorsement or testimonial about weight loss success or

weight loss maintenance when those claims are not representative or

``typical'' of what Weight Watchers participants generally achieve.

Part I.D. requires Weight Watchers, when employing such ``atypical''

weight loss success or weight loss maintenance testimonials, to

disclose either (1) what the generally expected success would be for

Weight Watchers customers; or (2) the limited applicability of the

endorser's experience to what consumers may generally expect to

achieve.

Part I.D. of the proposed order addresses advertisements containing

an endorsement or testimonial about weight loss success or weight loss

maintenance when those claims are not representative or ``typical'' of

what Weight Watchers participants generally achieve. In accordance with

the principles set out in the Endorsement Guides, Part I.D. would

require Weight Watchers, when employing such ``atypical'' weight loss

success or weight loss maintenance testimonials, to disclose either (1)

what the generally expected success would be for Weight Watchers

customers (Part I.D.(1)); or (2) the limited applicability of the

endorser's experience to what consumers may generally expected to

achieve (Part I.D.(2)). For weight loss testimonials Part I.D. of the

proposed order permits Weight Watchers to accurately make the

``generally expected success'' disclosure in one of two ways. First,

the company may state, in the relevant advertisement, ``Weight loss

averages (number) lbs. over ____ weeks.'' Alternatively, Part I.D. of

the proposed order permits Weight Watchers to disclose in the relevant

advertisement ``Average weight loss (number) lbs. More details at

centers.''

Required disclosures that are made at centers--which are described

in Appendix B of the proposed order--may be made either in the

introductory brochure or in a separate document entitled ``Weight Loss

Information.''

The proposed order makes clear that the alternative disclosures

requirement contained in Parts I.C. and D. do not relieve Weight

Watchers of the obligation to substantiate any maintenance success

claim in accordance with Part I.A. of the proposed order.

Other Proposed Order Relief

Part I.E. of the proposed order prohibits unsubstantiated

comparative efficacy claims. It would require Weight Watchers not make

comparisons between the efficacy or success of one or more of its

weight loss programs and the efficacy or success of any other weight

loss program(s) unless it possesses and reliefs upon competent and

reliable evidence, which when appropriate must be competent and

reliable scientific evidence, that substantiates the representation.

Part I.F. of the proposed order covers rate of weight loss claims.

It requires Weight Watchers to cease and desist from making any

representation, directly or by implication, about the rate or speed at

which any participant in any weight loss program has experienced or

will experience weight loss, unless true.

Part I.G. of the proposed order would require Weight Watchers to

cease and desist from making any representation, directly or by

implication, about the existence, contents, validity, results,

conclusions, or interpretations of any test, study, or survey, unless

true.

Part I.H. of the proposed order is fencing-in relief which would

require Weight Watchers to cease and desist from making any

representation, directly or by implication, about the performance or

efficacy of any weight loss program, unless true.

Part II. of the proposed order would require Weight Watchers to

notify the Commission of certain changes in the corporate respondent.

Part III. of the proposed order would require Weight Watchers, for

a period of three years after date of last dissemination of any

representation covered by the order, to maintain and make available to

the FTC materials relied upon in disseminating such representation and

any evidence that contradicts or qualifies such representation.

Part IV. of the proposed order covers the distribution of the order

to designated current and future persons. The order must be distributed

to regional managers and those having point-of-sale responsibilities

under the order as well as key individuals involved in the placement of

advertisements.

[[Page 52342]]

Part V. of the proposed order covers the efforts Weight Watchers

shall use to obtain its weight loss program franchisees' and licensees'

(``franchisees'') compliance with the order.

Weight Watchers is required under Part V., among other things, to:

(1) distribute a copy of this order to each of its weight loss

program franchisees or licensees within forty-five days after service

of the order;

(2) review advertising and promotional materials submitted to it

from its franchisees or licensees prior to dissemination and

publication to determine compliance with the requirements of the order;

(3) notify any franchisee or licensee in writing if any advertising

or promotional material does not comply with the requirements of the

order and that it should not be disseminated or published;

(4) monitor franchisee and licensee advertising and where it finds

advertising that has not been submitted to it and which it believes is

not in compliance with the requirements of the order, to notify such

franchisee or licensee in writing of its findings and that such

advertising should be withdrawn;

(5) maintain separate files for each franchisee or licensee

containing copy of the signed receipt and copies of any correspondence

relating to any advertising and promotional materials with respect to

the issues raised by the order for a period of three (3) years;

(6) make these files available to the Commission staff for

inspection and copying; and

(7) where the order provides for the distribution of documents

containing certain information to participants, to include such

information in ``Program'' materials which its franchisees or licensees

are required to supply to each participant.

In addition, subparagraph B. of Part V. requires Weight Watchers to

include in all future weight loss program agreements with new

franchisees or licensees a requirement that the franchisee or licensee

operate its business in full compliance with the prohibitions and

affirmative requirements imposed on respondent pursuant to Part I. of

the Commission's order. This part of the order defines ``new

franchisees or licensees'' to mean those who are not franchised or

licensed to conduct any weight loss program, or those who do not own or

control such franchisees or licensees, at the time the order becomes

final.

Part VI. of the proposed order would require Weight Watchers to

file a compliance report with the Commission within sixty days after

the date of service of this order.

Part VII. of the proposed order is a sunset provision that

indicates, in part, that this order will terminate twenty years from

the date of its issuance.

The purpose of this analysis is to facilitate public comment on the

proposed order, and it is not intended to constitute an official

interpretation of the agreement and proposed order, or to modify in any

way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 97-26525 Filed 10-6-97; 8:45 am]

BILLING CODE 6750-01-M